Philippine Stock Exchange President Hans Sicat, who has been elected for a third term, said the bourse will focus in the next 12 months on introducing new products to boost trading in one of Asia’s smallest markets.
“The goalpost for us now will be really how many products we can start adding to the exchange,” Sicat said in a briefing in Manila after the company’s annual stockholders’ meeting. The next 12 months will be “critical” on the introduction of new products including exchange-traded funds and futures, he said.
Talks for a possible merger with the Philippine Dealing & Exchange Corp., which runs a trading system for bonds, are ongoing, Sicat said. “If we have a choice we’d rather do it sooner rather than later and hopefully this year as opposed to two years from now,” he said.
Broadening the exchange’s array of products could help spur investor interest in a stock market that’s on its way to a fifth year of gains. The Philippine Stock Exchange Index (PCOMP) has rallied 25 percent this year and gained in each of the previous four years as foreign net buying rose to $2.55 billion in 2012 from $420 million in 2009.
In the two years Sicat has served as president, and Jose Pardo as chairman, the bourse has extended trading hours, expanded public float of companies, raised transparency and broadened the investor base. While trading in Philippine shares doubled to $266 million a day this year from $132 million in 2011, the turnover is only 40 percent of the level in Indonesia, less than half that of Malaysia and 14 percent of Thailand.
Exchange-traded funds will be introduced by June or July while futures trading, in cooperation with the Singapore Exchange Ltd., may come later, Sicat said.
The bourse is also talking with institutional investors to provide shares for establishing a “full securities borrowing and lending program” that will pave the way for other products, Sicat said.
The exchange will probably have seven to 10 initial share sales this year, including so-called listing by introduction and back-door listings, Sicat said. Equity sales, including follow-on offerings, this year will exceed the record 219 billion pesos ($5.3 billion) reached in 2012, he said.